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How a Solend Whale With a $108M Loan Nearly Crashed the Solana Network

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Solana NFT Platform Fractal Aims to Simplify Web3 Gaming With Google Sign-In

Solend, a decentralized lending protocol on the Solana network, has narrowly avoided having 95% of the SOL deposits in its lending pool liquidated.

At the center of the controversy is a large account holder, known as a whale, with an outsized presence on the lending protocol and responsible for the vast majority of the SOL coins within it. The account had an outstanding loan of $108 million worth of US Dollar Coin (USDC) and Tether (USDT), collateralized in SOL, the native cryptocurrency of the Solana network. The loan risked being liquidated as the price of SOL tanked to as low as $27 on Wednesday and Saturday last week.

Had the price of SOL continued to drop, and the $21 million in SOL collateralizing the loan gone into liquidation, Solend would have been left with almost no SOL. The project’s co-founder suggested that the rush to buy up that much SOL for cheap could have crashed the $2.6 billion Solana network.

Early on Tuesday, the protocol announced that the whale borrower had moved $25 million worth of USDC debt to Mango Markets, another Solana-based lending protocol, thereby alleviating Solend of some of the burden and reducing the protocol’s risk. 

The total value locked in the Solend protocol topped out at $1.4 billion at the start of April, was cut in half, to $725 million, during the collapse of Terra in May and has been on a rapid decline over the past week. 

As of Tuesday afternoon, there was $247 million worth of assets locked in the protocol and another $171 million in outstanding loans.

That liquidation would have been disastrous for Solend because, with prices lagging, the market would have struggled to absorb the $21 million worth of SOL (or 20% of the collateral) that would have been automatically liquidated. The lending protocol would have been at risk of losing almost its entire SOL lending pool at seriously low rates.

And the scramble by liquidators to buy up the $21 million worth of SOL for fire sale prices would have put the Solana network through its paces, wrote Solend’s pseudonymous co-founder Rooter.

“This could cause chaos, putting strain on the Solana network,” they wrote in the blog post. “Liquidators would be especially active and spamming the liquidate function, which has been known to be a factor causing Solana to go down in the past.” 

Having convinced the borrower to move some of their debt to another protocol, Solend managed to reduce some of its exposure, but didn’t remove it entirely. The borrower still owes $84 million to the protocol. 

The community has taken action to mitigate that risk, or at least prevent it from happening again. 

Earlier today, the Solend community voted to overwhelmingly approve a proposal that would impose a $50 million borrowing limit per account and adjust the smart contract (the computer code that governs the lending protocol) so that it will temporarily liquidate 1%, not 20%, of deposits on undercollateralized loans.

The DeFi lending protocol, its name a portmanteau of the words “Solana” and “lend,” started trying to contact the borrower last week when it looked like the 5.7 million SOL deposit collateralizing a $108 million stablecoin loan (US Dollar Coin and Tether), could be liquidated if the price of SOL dropped to $22.30.

Rooter, the co-founder, even introduced a proposal, labeled “SLND1,” to take control of the account so that the collateral could be liquidated in an organized manner that wouldn’t clog (and potentially crash) the Solana network. But after voting in support of that plan, the community overturned it.

“We’ve been listening to your criticisms about SLND1 and the way in which it was conducted,” the Solend team wrote on the proposal to invalidate the vote after receiving feedback that 24 hours had not been enough time for members to cast their votes.

At the time, markets were reeling from news that crypto lender Celsius had frozen withdrawals to prevent a bank run and $3 billion hedge fund Three Arrows Capital was negotiating with creditors to keep itself solvent. 

Solend works the same as many other lenders in DeFi, which is a term used for non-custodial apps that enable users to trade, borrow and loan crypto assets without any third-party intermediaries, such as banks. On Solend, users deposit collateral—currently 47 different coins and tokens across 18 liquidity pools—and borrow crypto assets worth up to 75% of their collateral. 

Using crypto to secure loans on any blockchain has been especially risky in the turbulent market. In May, Lido took to Twitter to warn borrowers that the Ethereum they had deposited to borrow Lido Staked Ethereum (stETH) might be liquidated

A similar problem reared its head last week when a large borrower, at the time believed to be Three Arrows Capital, tried to stave off liquidation of $300 million worth of loans from DeFi lenders Aave and Compound.

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Tulip Protocol Officially Integrates Chainlink on Solana Mainnet

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Tulip Protocol Officially Integrates Chainlink on Solana Mainnet

Today, Tulip Protocol made the announcement that they have integrated Chainlink Price Feeds in order to better secure their yield aggregating platform that is running on the Solana mainnet. The team had previously stated their intention to integrate Chainlink Price Feeds, and at this point, the connection has been completely put into action. Chainlink is the premier decentralized oracle network in the world, safeguarding tens of billions of dollars in smart contracts. It has diversified its offerings across other blockchains, notably Solana, Fantom, Polygon, BNB Chain, and others.

In a recent blog post, the team behind the Tulip Protocol explained that they had integrated Chainlink to provide users with more confidence that leveraged positions will be liquidated equitably using extremely accurate price data and that the protocol will continue to be completely collateralized at all times.

According to Tomasz Wojewoda, Head of Global Sales at Chainlink Labs:

“We’re pleased that Tulip Protocol has integrated Chainlink Price Feeds on Solana, helping secure its yield aggregation protocol with highly robust, decentralized market data. With the high-throughput performance of Solana and the strong security guarantees of the Chainlink Network, Tulip Protocol is able to empower users with a performant and secure platform.”

Tulip Protocol Seeks To Take Advantage Of Solana

Tulip Protocol brings together lenders who receive a return on their deposits and borrowers who are interested in gaining access to leverage. Users who initiate leverage positions are responsible for maintaining a loan-to-value (LTV) ratio that has been previously established. The Tulip Protocol then uses the asset price data that is provided by Chainlink Price Feeds to verify that this ratio is accurate. If the value of the collateral falls below the threshold that was established by the protocol, then their position will be immediately liquidated to assist in guaranteeing that the lenders will be repaid.

Tulip Protocol intends to capitalize on Solana by giving users the ability to more regularly reinvest their income and grow their assets without having to pay exorbitant amounts of gas expenses. Chainlink oracles can now be natively integrated on Solana, making it possible for Solana-based applications to benefit from enhanced levels of security and transparency. Yesterday, OpenOcean made the announcement that they would be integrating Chainlink Price Feeds in order to help secure the limited order functionality on many chains. These chains include Avalanche, Ethereum, Polygon, Fantom, and BNB Chain.

According to Senx, Co-Founder of Tulip Protocol:

 “We’re excited to be using Chainlink Price Feeds on Solana to help secure our yield aggregation platform. By leveraging the most secure and reliable on-chain data available, we’re able to provide our lenders and borrowers with greater assurances that liquidations are based on accurate price data, and the protocol will maintain a healthy loan-to-value ratio through all market conditions.” 

Allowing Stakers To Benefit From Higher APYs

Natives of the blockchain as well as newcomers to the technology are beginning to understand that decentralization does not necessarily equate to a secure platform. Given that Web3 services are currently disclosing their susceptibilities to attacks from both within and outside the network, further initiatives should be undertaken to improve the safety of user assets. Fortunately, a growing number of blockchain businesses are beginning to add various levels of security to their services in order to solidify the trust of their existing customers and attract additional investors in the near and distant future.

Tulip Protocol is the very first yield aggregation platform to be built on Solana, and it features auto-compounding vault techniques. The dApp was developed to make use of Solana’s blockchain, which has a low cost and high efficiency, hence enabling the vault techniques to compound frequently. Stakeholders are able to reap the benefits of greater APYs as a result, without the need for active management.

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Is your SOL safe? What we know about the Solana hack

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On this week’s episode of “The Market Report,” Cointelegraph’s resident experts discuss the latest updates concerning the recent Solana (SOL) hack.

To kick things off, we broke down the latest news in the markets this week:

Bitcoin realized price bands form key resistance as bulls lose $24K, significant whale activity between $22,000 and $24,800 adds to the complexity of the current spot market setup. Bitcoin (BTC) consolidated lower on Aug. 9 after familiar resistance preserved a multi-month trading range. When will we finally break out of this price range and make the move towards $30K?

Institutions flocking to Ethereum for 7 straight weeks as Merge nears: Report, “Greater clarity” around the Merge has driven institutional inflows into Ethereum products, according to a CoinShares report. Is the ETH merge finally around the corner and will it bring new all time highs to ETH or has the price already been factored into the current price?

Circle freezes blacklisted Tornado Cash smart contract addresses, Crypto data aggregator Dune Analytics said that, on Monday, Circle, the issuer of the USD Coin (USDC) stablecoin, froze over 75,000 USDC worth of funds linked to the 44 Tornado Cash addresses sanctioned by the U.S. Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons (SDN) list. Could this mark the end for Tornado Cash or is there a way they can redeem themselves?

Next up is a new segment called “Quick Crypto Tips,” which aims to give newcomers to the crypto industry quick and easy tips to get the most out of their experience. This week’s tip: Have some funds ready to buy further downturns.

Market expert Marcel Pechman then carefully examines the Bitcoin and Ether (ETH) markets. Are the current market conditions bullish or bearish? What is the outlook for the next few months? Pechman is here to break it down. The experts also go over some markets news to bring you up to date on the latest regarding the top two cryptocurrencies.

After Marcel’s market analysis, our resident experts discuss whether your SOL is safe and the latest updates on the Solana hack. We also discuss why the network has been victim to so many hacks and downtimes. What exactly do these exploits mean for the Solana platform and if you should be worried.

Lastly, we’ve got insights from Cointelegraph Markets Pro, a platform for crypto traders who want to stay one step ahead of the market. The analysts use Cointelegraph Markets Pro to identify two altcoins that stood out this week: Radicle’s RAD and DigiByte’s DGB.

Do you have a question about a coin or topic not covered here? Don’t worry. Join the YouTube chat room, and write your questions there. The person with the most interesting comment or question will be given a 1 month free subscription to markets Pro worth $100!

The Market Report streams live every Tuesday at 12:00 pm ET (4:00 pm UTC), so be sure to head on over to Cointelegraph’s YouTube page and smash those like and subscribe buttons for all our future videos and updates.

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Web3-Based ZepetoX to Build on Solana

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Web3-Based ZepetoX to Build on Solana

Singapore, Singapore , Aug. 09, 2022 (GLOBE NEWSWIRE) — Today, the ZepetoX team (ZTX, ZepetoX.io) announced its foray into the web3 space, sharing its vision to build an open world that empowers creators and communities to build, play and earn.

ZepetoX is the crypto metaverse initiative jointly incubated by ZEPETO – Asia’s largest metaverse platform with over 320 million registered users – alongside leading global blockchain organizations including Jump Crypto.

As the sole blockchain project comprehensively backed by ZEPETO, ZepetoX will have exclusive ties to ZEPETO in terms of IP including technological, design, and content assets as well as bridges to facilitate user onboarding between the two platforms. ZepetoX’s blockchain development efforts will be advised by Jump.

“ZepetoX is our official venture into the blockchain industry. We feel that web3 opportunities should be advanced through a crypto-native approach, which is why we are excited to have Jump as a contributor to developing a new platform that would have exclusive connections to ZEPETO. Overall, we believe that ZepetoX can build the ideal web3 platform to not only bring blockchain to our existing users but also to expand our footprint in the blockchain space through various disruptive initiatives,” said Daewook Kim, CEO of Naver Z – the operating entity of ZEPETO.

“We are excited to support ZepetoX’s efforts aimed at onboarding new audiences into the rapidly growing crypto space. ZEPETO’s expertise and technological know-hows accumulated over the past years from building an immersive social platform will serve as a springboard for ZepetoX,” said Saurabh Sharma, Partner at Jump Crypto.

Building on the Solana network, ZepetoX will offer a web-based 3D open world with varying levels of gamification integrated as well as opportunities for users to monetize via ownership of digital assets and social interaction. Ultimately, ZepetoX aims to empower self-expression through customizable avatars and lands that can be equipped with NFTs from a rich collection of assets created by diverse creators, DAOs, or communities.

“I am thrilled to see IP powerhouses like ZepetoX choosing to build their metaverse on Solana,” said Anatoly Yakovenko, Co-Founder of Solana. “Projects like ZepetoX create new pathways for onboarding millions of users to web3.”

“Our global team brings a depth of crypto native experiences and our goal is to build on the foundation of ZEPETO to spearhead the adoption of blockchain among metaverse users, developers, and creators,” said co-CEO of ZepetoX, Chris Chang.

In the coming months, ZepetoX will launch its first land sale. The lands will be tradable on the ZepetoX marketplace, which will feature a variety of different NFTs as the open world project evolves. Further details on the sale will be available on the ZepetoX website in the coming weeks.

# # #

About ZepetoX: ZepetoX (ZTX) is a web3 company building an immersive content-driven platform for users to create, trade digital assets and enjoy social interaction. Founded in 2022, ZepetoX is the blockchain initiative of ZEPETO, widely regarded as the largest Asia-based metaverse platform boasting over 320 million lifetime users with over 2.5 billion virtual fashion items sold.

Contacts:

Vera: vera@ztx.foundation

News Via KISS PR Crypto Press Release Distribution Media Contact az@kisspr.com

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